anonymous

5 years ago

What capital structure?...

it's a mix of a company's long-term debt, specific short-term debt, common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds.

Company funds its operations through different financial sources.Capital structure of a company is the percentage of these sources to the total capital.
Eg: Capital Structure of Company X
Common Equity 30 %
Long term debt 40 %
Short term debt 20 %
Preferred Equity 10 %
-------------------
Total Capital 100 %